Scottish Court of Session Decisions

Subject_1 SALE.
Subject_2 DIVISION II.

Sale of Moveables.
Subject_3 SECT. I.

Sale, when completed. - Price not stipulated. - Where the Buyer's faith is followed.

Hitchiner, Hunter & Company,
v.
Stewart and Ninian

Date: 8 December 1803
Case No. No 41.

Sale of goods by a factor in his own name, and credit given to him in account with the purchaser, sustained against the constituent.

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Hitchiner, Hunter Company, gunpowder manufacturers at Stobbsmill, raised an action against Stewart and Ninian, merchants in Greenock, for payment of the price of a quantity of gunpowder. This gunpowder was sold to them by Messrs A. and J. Robertson, who, as the pursuers alleged, acted as their agents, and who sold it out of their magazine at Greenock.

Stewart and Ninian stated in defence, that they did not know that Hitchiner, Hunter and Company were the proprietors of this gunpowder, or that Robertson and Company acted as their consignees; that the order had been given by them to Robertson and Company, who executed it in their own name, and, as they understood, furnished it on their own account; and in evidence of this they produced the invoice which accompanied the goods, bearing that they were bought of Robertson and Company, together with an account-current, which had been sent them by that Company, instructing compensation of the article, in which the gunpowder is stated on the credit-side, leaving a balance due to the defenders.

The Lord Ordinary “finds, that the gunpowder in question was purchased from and delivered by A. and J. Robertson, bearing to be on their own account, and not for behoof of the pursuers, as appears from the invoice which accompanied the same; and as the defenders positively deny, that they knew Robertson and Company were acting in the character of agents or consignees for the pursuers, or that the powder was part of the property consigned; and as there is no evidence produced or condescended on to instruct the contrary, assoilzies the defenders from this action, and decerns.”

The pursuers reclaimed to the Court, and

Pleaded, A rei vindicatio, or an action for the price, is competent to the owner of a subject which has been disposed of by a person who is not proprietor. If, therefore, a mandatary who is employed to sell goods for the owner, sells them in his own name, he is guilty of a fraud, and the proprietor, upon shewing how he came to lose possession, will recover the property, Erskine, B. 2. Tit. 1, § 24. Dict. voce Compensation; Alison against Fairholm, November 1765, voce Surrogatum. It makes no difference whether the person got possession with the consent of the owner or without it; Street, June 9. 1669, voce Surrogatum; Morrison against Creditors of Stewart, June 21. 1781*. Indeed, if a purchaser from an agent may, in a question with the constituent, plead compensation upon a debt due by the agent, the real owner cannot be said to have a claim against the purchaser for the price.

Answered, There is a great difference between fraud, on the part of a mandatary, who has the interim possession of another's goods, and a vitium reale in the subject. In the one case, if the purchaser of the goods be not a particeps fraudis, but obtain possession of them bona fide, though an action may lie against the mandatary at the instance of his constituent for the price, no such action is competetent against a bona fide purchaser. But, in the other case, the owner has an action “adversus quemcunque possessorem.” The reason of this distinction is, that when the owner intrusts his goods to another, he is himself in some degree to blame if that person is guilty of a breach of trust, and therefore the law does not give him an action against the third party for recovery, Stair, B. 1. Tit. 9.

* Not reported, See Appendix.

It would be attended with the worst effects in mercantile dealings, if a bona fide purchaser were to be responsible for a breach of trust in the seller. The possession of moveables affords in all cases a presumption of property; and it would tend greatly to restrain the freedom of commerce, if before making a purchase it were necessary to enter into an investigation of the different relations which may subsist in the way of trade between one mercantile house and another, Erskine, B. 3. Tit. 3. § 34.; Boylston, 24th January 1672, voce Surrogatum; Baxter against Bell, December 17. 1800. (See Appendix).

The Lords, upon advising the petition with answers, adhered.

Lord Ordinary, Craig. Act. Connell. Agent, James Hay, W. S. Alt. Burnet. Agent, Jo. Masson. Clerk, Menzies. Fac. Col. No 126. p. 279.